FASEA has released exam results from the eighth Financial Advisers Exam held in October 2020.
Result highlights include:
- over 10,460 advisers have passed the adviser exams held to date
- overall, 89.5% of advisers who have sat the exam (irrespective of how often it was sat) have passed, representing 49% of advisers on ASIC’s Financial Adviser Register (FAR).
- 80.6% of candidates sitting the exam for the first time passed the October exam (compared with an average of 85.8% across all exams)
- 60% of advisers re-sitting the exam passed on their second attempt compared to 57% across all exams
- 76% of candidates passed the October exam (compared with an average of 83% across all exams)
- 625 advisers sat the exam compared with an average of 1540 across all exams
- the exam is marked to a credit standard and the pass rate varies with each exam
- the exam was subject to ACER’s comprehensive marking approach and was set at a consistent standard to prior exams
“FASEA congratulates successful candidates on completing an important component of their education requirements under the Corporations Act during the current extraordinary circumstances.
The overall pass rate of 76% may be attributed to several factors. Firstly, the October exam attracted a much smaller cohort of advisers in general, combined with a higher than usual proportion of re-sitters. For first time exam sitters during October, the pass rate remained at the 80% average.
Over 11,690 advisers have sat the exam with 9 in 10 demonstrating they have the skills to apply their knowledge of advice construction, ethics and legal requirements to the practical scenarios tested in the exam,” FASEA Chief Executive Officer Stephen Glenfield said.
Further analysis of the October exam data has highlighted areas for improvement, particularly amongst unsuccessful candidates. Exam question areas advisers have underperformed in the October exam are set out below (categorised by curriculum areas).
Financial Advice Regulatory and Legal Requirements
- Assessing whether the adviser has appropriately scoped the advice
- Assessing whether advice recommendations meet the client’s best interests
- Demonstrating knowledge of when key advice documentation is provided to the client i.e. FSG/SOA
- Demonstrating knowledge of the consequences of breaches of financial disclosure obligations for themselves, for clients and for the industry.
Applied Ethical and Professional Reasoning and Communication
- Applying the Code of Ethics to advice scenarios identifying compliance and non-compliance
- Demonstrating an understanding of an adviser’s ethical obligations when advising on complex family structures
Existing advisers have until the end of 2021 to pass the exam. FASEA is offering 6 sittings in 2021 both online and in physical locations (subject to COVID protocols). To maximise the number of potential sittings an adviser may have in 2021, FASEA encourages advisers to register for early sittings next year. Advisers who sit either the January or March 2021 exams will have up to 3 sittings to pass next year. Exam registration information can be found on the FASEA website (link).
Over 1000 advisers have registered for the January exam, to be held in metropolitan and regional locations and online from 28 January to 2 February.
To assist advisers preparing for the exam, FASEA provides preparation resources, including practice questions, online at: – https://www.fasea.gov.au/prepare/. Practice questions are regularly updated and can be found on the FASEA website or via the advisers’ exam account. Feedback received from past re-sit participants in the Exam indicated these resources were useful for their Exam preparation
Additional background
Section 921B (3) of the Corporations Act 2001 requires advisers to pass an exam approved by the standards setting body. The Act requires existing advisers to pass the exam before 1 January 2022. New entrants are required to pass the exam before becoming a Provisional Relevant Provider.
The exam tests three domains of knowledge and skill:
- financial advice regulatory and legal obligations
- applied ethical and professional reasoning and communication: and
- financial advice construction
FASEA, with the support of the Exam administrator (ACER), has successfully offered 9 exam sittings to date on more than 45 exam days and 600 exam sessions. Since June 2019, exams have been offered in capital cities and in 22 regional locations across Australia (with the April and June 2020 exams being remote only exams due to COVID-19 restrictions).
Candidates are required to demonstrate professional reasoning and apply knowledge acquired to financial advice scenarios at AQF7 level of reasoning.
FASEA is offering six further exam sittings in 2021. Unsuccessful candidates may re-sit the exam during this period.